The Variance of the Sum of Two Investments Will Be

question 57

True/False

The variance of the sum of two investments will be equal to the sum of the variances of the two investments when the covariance between the investments is zero.

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Definitions:

Transfers

Movements of income or wealth without the exchange of goods or services, such as grants, subsidies, or remittances.

Income Mobility

The ability of individuals or households to move across different income levels or brackets over time.

Income Quintile

A statistical measure dividing the population into five equal groups according to income level, to analyze the distribution of income or wealth.

Income Mobility

Refers to the ability for an individual or family to move up or down the economic ladder within a society over time.